Correlation Between Aba Chemicals and Hubei Xingfa
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By analyzing existing cross correlation between Aba Chemicals Corp and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Aba Chemicals and Hubei Xingfa and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aba Chemicals with a short position of Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Hubei Xingfa.
Diversification Opportunities for Aba Chemicals and Hubei Xingfa
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aba and Hubei is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals and Aba Chemicals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aba Chemicals Corp are associated (or correlated) with Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Aba Chemicals and Hubei Xingfa
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Hubei Xingfa. In addition to that, Aba Chemicals is 1.44 times more volatile than Hubei Xingfa Chemicals. It trades about -0.29 of its total potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about -0.08 per unit of volatility. If you would invest 2,314 in Hubei Xingfa Chemicals on October 30, 2024 and sell it today you would lose (127.00) from holding Hubei Xingfa Chemicals or give up 5.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Hubei Xingfa Chemicals
Performance |
| Timeline |
| Aba Chemicals Corp |
| Hubei Xingfa Chemicals |
Aba Chemicals and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Hubei Xingfa
The main advantage of trading using opposite Aba Chemicals and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Hubei Xingfa can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hubei Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Aba Chemicals vs. Zijin Mining Group | Aba Chemicals vs. Wanhua Chemical Group | Aba Chemicals vs. Baoshan Iron Steel | Aba Chemicals vs. Shandong Gold Mining |
| Hubei Xingfa vs. Chengtun Mining Group | Hubei Xingfa vs. Zhongrun Resources Investment | Hubei Xingfa vs. Tieling Newcity Investment | Hubei Xingfa vs. Suzhou Industrial Park |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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